MRT III Funding Corp settles $31-million notes

MANILA, Philippines - MRT III Funding Corp., which owns the MRT III elevated railway line, has settled $30.97 million worth of notes due this month.

Philippine Rating Services Corp. said it has been informed by Bank of New York Mellon (BoNY), trustee for the MRT III Funding Corp. Limited Asset-Backed Notes, that $30.972 million was paid for the Tranche 2-B Note due in August this year.

Philratings said principal payments for Tranche 1 and 2-A which were due in 2007 and 2008, respectively, were similarly made on time. 

PhilRatings likewise noted that as early as June 22, 2009, account balances with BoNY Mellon were already more than sufficient to cover the principal due on Tranche 2-B. 

The asset-backed notes issue is a securitization of future dividends from Metro Rail Transit Corp. (MRTC) which flow through a series of holding companies and special purpose vehicles, to MRT III Funding Corporation, the Issuer of the Notes.  

The dividends arise from equity rental payments made by the Department of Transportation and Communication (DOTC) to MRTC under a 25-year build -lease-transfer (BLT) agreement for the construction of the Light Rail Transit System, Phase 1 (LRTS Phase 1, or MRT) in Metro Manila. 

PhilRatings stated that it is presently reviewing its existing rating for the other note tranches that will be maturing from 2010-2025. The next payment of $33.885 million will be due on Aug. 8, 2010 for the zero-coupon Tranche 2-C of the Notes. 

The asset-backed notes are currently rated PRS-Baa. An obligation rated PRS Baa exhibits adequate protection parameters. However, adverse economic conditions and changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

PRS Baa-rated issues may possess certain speculative characteristics. PhilRatings is the country’s pioneer domestic credit rating agency, accredited by both the Bangko Sentral ng Pilipinas and the Securities & Exchange Commission. The agency has twenty-four years of experience in providing credit ratings to promote the development of the Philippine capital market.